First Greece, Now Italy -- Its Death May Be Slow and Painful, But the European Union as We Know It Is Doomed

THE REAL NEWS TODAY IS ABOUT ITALY AND THE EU. Italy is finally ready to form a govenrment after the March 4 elections that left the middle of the Italian political spectrum out in the cold. And, it is a government that will challenge many of the Eurozone's fiscal policies, as well as European Union policies in general. • • • ITALY TO BE GOVERNED BY THE POPULIST RIGHT. The Guardian reported on Monday that Italy's populist coalition would name a political novice as prime minister nominee in a meeting expected to occur Monday afternoon with Italy's president. Leaders of the coalition formed by the populist Five Star Movement (M5S) and the far-right League are expected to put forward Giuseppe Conte to be PM. The Italian press are reporting that Giuseppe Conte, 54, a lawyer and M5S member, is to take the job after Matteo Salvini, the leader of the League, and the M5S leader Luigi Di Maio, ruled themselves out. • In thelocal.it, an Italian news site in English, Conte was described on Friday as "a largely unknown lawyer and law professor, far removed from the cut-throat world of Italian politics." As of Friday, thelocal.it was reprotting that : "Luigi Di Maio, head of the anti-establishment Five Star Movement, and far-right League leader Matteo Salvini are to present their choice for prime minister in separate meetings with President Sergio Mattarella. Mattarella has to agree on a prime minister with the parties before they can seek approval for their new government in parliament. The pair have remained tight-lipped over their pick, but ahead of Monday's crucial meeting, the Italian media have gambled on 54-year-old Conte. Born in 1964 in the tiny village of Volturara Appula in the southern region of Puglia, Conte has had an impressive career in law and academia. Di Maio had presented Conte as part of his team of ministers ahead of the March 4th general election, putting him charge of simplifying the country's infamous bureaucracy. That was the general public's first and so far only encounter with Conte,who was subsequently invisible in the government talks that followed the inconclusive election, which later saw Five Star and the League striking a coalition government deal. Conte's CV includes study and research positions at some of the world's most prestigious universities, including Cambridge University, the Sorbonne and New York University." • And, in a Monday report from Rome, the Guardian said that : "Supporters of M5S are publicizing plans for a common government program with the League in Milan....Speaking on Sunday, Salvini said : 'We have agreed on the head and ministers and hope that nobody will veto a choice that represents the will of the majority of Italians.' He had reiterated a day earlier that the prime minister would be neither Di Maio nor himself, but 'a professional who contributed to the drafting of the contract.' Conte, relatively unknown in the political world, is a law professor at the University of Florence. He is Di Maio’s personal lawyer and the mastermind behind the anti-establishment party’s pledge to abolish more than 400 'useless laws' that it claims will cut bureaucracy and free up the economy. He also said during the election campaign that Italy’s anti-corruption laws needed to be tightened and major school changes introduced....Meanwhile, Salvini is tipped to be named Italy’s next interior minister and Di Maio minister of labor. The government program, which includes plans for a flat rate of income tax and universal basic income, as well as a raft of hardline policies against illegal immigrants, was backed by 94% of M5S members in an online poll on Friday, with 91% of League voters also in support....Between them, M5S and the League won more than 50% of the vote in an election in March. Support for the League has grown from 17% to 25% since then, according to the most recent opinion polls, while support for M5S is steady at 32%. • • • ITALY'S NEW POLITICAL AGENDA. As the Guardian puts it : " Italy’s policies make sense -- it’s Eurozone rules that are absurd." • AFP and The Local news outlined the M5S / League political agenda on Friday. Here are the kep pointe. §§ ITALY'S DEBT. Italy is battling a public debt of 2.3 trillion Euros ($2.7 trillion), 132% of GDP -- the second highest ratio in the EU behind Greece. The M5S-League coalition promises to stimulate the economy through more spending : "The government's actions will target a program of public debt reduction not through revenue based on taxes and austerity, policies that have not achieved their goal, but rather through increased GDP by the revival of internal demand." Just four sentences of the document dealt with the public debt and deficit. §§ THE EU. The Eurosceptic coalition promises a series of measures to rein in the EU, including renegotiation of EU treaties and a review of the EU's economic governance on issues such as the single currency. §§ TAX AND BASIC INCOME. The League has inserted its flat tax policy into the program, adding a 20% rate to the 15% proposed before the election. Also included is Five Star's flagship basic income plan, which sees 780 Euros a month paid to those with no revenue, while those earning less than the basic will see their income topped up. It will be revoked from anyone who refuses three job offers within two years. §§ IMMIGRATION. The new coalition pledges to stop "the business" of migration, cracking down on smuggling networks and cooperatives that manage asylum centers. They also want to speed up expulsions of illegal immigrants. They demand that Italy have "a decisive role" in European negotiations on migration and want to accelerate the examination of asylum applications and systematic repatriation of rejected applicants, who can be held up to 18 months in detention centers. §§ ISLAM. Proposed are a registry of imams, immediate closure of unauthorized mosques and the inclusion of "community involvement" into a new law on the building of mosques. §§ SOUTHERN ITALY. The parties decided not to outline specific measures targeting the south of the country, which has historically had a higher level of unemployment and poverty and a lower level of public services. This decision was taken "in the knowledge that all the political choices in this contract...are oriented towards a homogeneous economic development for the country." §§ PENSIONS. A gradual roll back of a retirement that is due to reach 67 in 2019, instead enabling retirement when the sum of a person's age and years of social security contributions reach 100. §§ SECURITY. In the name of self-defence individuals would be allowed to shoot anyone who enters their home, even in the absence of a clear physical threat. This is something Salvini's League has campaigned for after several high-profile cases in which people have faced charges for shooting burglars. New prisons would be constructed, "as many foreign prisoners as possible" sent to serve sentences in their home country and large numbers of police officers -- all equipped with a video camera -- and carabinieri military police recruited. The parties also want tougher sentences for sexual crimes and under-age offenders. §§ RUSSIA. The agenda underlines Italy's place in the Atlantic alliance "with the United States as a privileged partner," but asks for the immediate removal of sanctions against Russia "which should not be perceived as a threat but as an economic and commercial partner." §§ INSTITUTIONAL REFORM. A drastic political proposal calls for slashing the number of parliamentarians to 400 MPs (from 630) and 200 senators (from 318). All would be banned from changing political parties during the legislature. They also want to beef up the use of popular referenda in law-making and grant more power to the regions. §§ CORRUPTION. A "severe and incisive anti-corruption law" is planned to recover resources and boost competitiveness. The parties propose increased penalties, life-time banishment from public office and the introduction of "agents provocateurs" to test the honesty of officials. §§ THE ECONOMY. Setting up an unspecified legal minimum wage, blocking the sale of the Alitalia airline and completely re-negotiating the controversial Turin-Lyon high-speed railway are all in the plan, which also sets out measures to increase savings protection and the accountability of both the management and supervisory authorities of banks. The development of the "green-economy" and use of electric cars is also a priority. §§ SOCIETY AND POLITICS. The document proposes that no-one convicted of corruption, being investigated for serious crimes or Freemasons can become ministers, while conflict of interest criteria for parliamentarians will be beefed up. Italy's commitments to international military missions would be reassessed. To shore up Italy's collapsing birthrate, the state would offer free nursery schooling for children of "Italian families" (whether this would in fact include all families resident in Italy is unclear) and not apply VAT on early childhood products. All illegal Roma camps are to be closed and Roma children who don't attend school are to be removed from their families. More stringent regulations on the gambling industry are proposed, including a complete ban on advertising and sponsorship. • It is a populist agenda, with strong nationalist and anti-immigration features. Here is how some key international media outlets describe it. §§ CNBC : “Their plan aims for a ‘necessary’ re-discussion over European treaties, a ‘reduction" of the powers coming from Brussels, and a return to a pre-Maastricht setting. Under an accord signed in the city of Maastricht in 1992, European countries are supposed to comply with Euro-wide fiscal rules. This means that their debt-to-GDP (gross domestic product) ratio should not exceed 60% and their public accounts should not register a deficit above 3% of GDP. Italy's debt stands at about 132% of GDP and the country registered a deficit of 2.3% in 2017. The two Italian parties want to increase public spending when in power. As a result, they want a relaxation of EU rules to be able to fill those campaign promises.” §§ BBC : “The populist leaders disagree with the EU sanctions on Russia and want them lifted. They do not see Russia as a military threat, but as ‘a potential partner for the EU and NATO.’ They want to work with Russia against the smuggling of migrants across the Mediterranean and the continuing influence of violent Islamists. They also see Russia as a key player in ending the wars in the Middle East.” §§ FINANCIAL TIMES : “The selection of the prime minister has been the subject of a tug of war between Mr Di Maio and Mr Salvini. Since Five Star clinched the largest vote share in the March election, it is expected to secure the post, but Mr. Salvini has resisted allowing letting Mr Di Maio take it. Huffington Post Italy reported on Sunday that Giuseppe Conte, a professor of public administration at the University of Florence, and Andrea Roventini, a professor of economics at Sant’Anna University in Pisa, were the other leading names under consideration.” • • • PROGRESSIVE ELITES ARE WORRIED ABOUT THE NEW ITALY. The Washington Post expressed on Monday the fears of the Progressive elites in Europe and the US ar Italy prepares to accept a populist govenrment : "But no matter the details, the populists' ascension in Rome crystallizes a real danger for Europe's liberal establishment. Their joint platform offers an emphatic riposte to the edicts of Brussels, potentially threatens the integrity of the Eurozone, promises a hard-line campaign against migrants and extends a hand of friendship to Moscow." • The Economist wrote that : "Western Europe's first fully populist government 'would be eccentric, idealistic, tinged with xenophobia, intolerant of corruption and economically illiberal. If the two anti-establishment parties fail to agree, the outlook will be no less uncertain. It will mean either new elections, or a technocratic government lacking the authority to implement necessary reforms." • The Progressive elites should look to their own policies as the reason for Italy's break-away. The Washington Post states : "Italian anger and disaffection with a succession of technocratic governments that delivered the two populist parties more than 50% of the vote in elections on March 4. The Five Star Movement -- originally formed on a lark by an irreverent comedian -- became the biggest party in the country with 37% of the vote, siphoning support from the imploding center-left. The League, a once-virulently racist regional party that has turned into a serious national player, surpassed expectations, outperforming its center-right allies led by former prime minister Silvio Berlusconi. Now, the populists intend to act boldly. Their proposed reforms include a guaranteed monthly income of close to $1,000 [€780] for poor families, tax cuts and a push against E.U.-mandated austerity measures. But it's not clear where the money for these programs will come from, and European officials fear that tens of billions of Euros in additional spending could lead to a potentially catastrophic new sovereign debt crisis on the Mediterranean." • One fear was expressed by Financial Times columnist Wolfgang Munchau, who invoked the dreaded historical analogy of Weimar Germany [it collapsed after unsupportable economic and fiscal treatment of Germany after WWI that led to hyper-inflation, as well as the strident demagoguery of the Nazis], arguing that Europe's elites underestimate "the scale of the threat that they face." • French finance minister Bruno Le Maire said on Sunday : “Italians must understand that the future of Italy is in Europe and nowhere else, but there are rules to respect." Le Maire was referring to the prospect of an even larger Italian budget deficit. Salvini sharply rebuked Le Maire on Twitter, writing that he didn't campaign to keep Italy "on a path of poverty, precariousness and immigration." • Salvini, one of the leaders of the new Italian coalition, could have said the same thing about every warning the EU has given Italy for the past several years about immigration. The new populist platform -- mass deportations of illegal migrants, scaling back Italy's efforts to rescue those attempting the sea journey from North Africa -- are part of their populist, nationalist politics, and they represented the views of 50% of Italian voters on March 4. The Five Star Movement / League victory at the polls is a wake-up call to the EU, which they argue has not done enough to support Italy on migration. The Washington Post says : "Of course, there remains plenty of skepticism about what the populists can actually achieve if they take power. They have a slender majority in parliament, and their more drastic reforms could face constitutional checks, including from the influential president himself. Italian journalist Ferdinando Giugliano wrote : "Even if they do form a government, the League and Five Star will probably repeat the experience of anti-establishment and Euroskeptic forces elsewhere. For all the tub-thumping rhetoric, many of their ideas will probably remain on paper." • • • IMMIGRATION -- THE CRUNCH POINT. The European Union ought to be addressing its loosely controlled and largely unwanted immigration policies, instead of shouting at Italy to fall into EU line about immigration. The Wshington Post, expressing the elitist view, says : "If they fail in the near term, however, there's no guarantee the centrist status quo will return. Italy itself has seen this cycle before : Italy's traditional parties collapsed in the 1990s, and corruption-weary voters turned to a flamboyant businessman in Berlusconi. But, neither he nor his center-left counterparts were able to fix Italy's woes, and their movements have now similarly floundered in favor of a new era of populism." WP columnist Anne Applebaum wrote : "Reeling from the flood of broken promises, electorates did not turn back to honest realists who told them hard truths or laid out the hard choices. On the contrary: In Italy, as in so many Latin American countries in the past, the failure of populism has led to greater dislike of 'elites,' both real and imaginary; a greater demand for radical and impossible change; and a greater sense of alienation from politics and politicians than ever before." • The fundamental problem with these elitist rants at the Italian populist coaltion is that they ignore the real problems that confront not only Italy but all of Europe. Italy is in all likelihood the beginning of a wider trend in the West. The WP points out that David Broder observed earlier this year how voters, animated by nationalist tribalism and a complete lack of faith in the ability of the state, "see their choice increasingly detached from any change of government policy." In its "chaos," Broder wrote, Italy "has provided the model for our time." Applebaum warned : "It is just as likely that irresponsibility and irrationality become something that people vote for, not something that they reject. "Watch what happens in Rome, because it could be America’s future." • Broder and Applebaum, and the Washington Post that quotes them as sages, miss the point entirely. Consider the facts about immigration on the ground in Italy. IT is described by thelocal.it : "The impending arrival of an anti-establishment, far-right government in Italy heralds even more controversy over how to deal with the flow of migrants as it raises the spectre of mass expulsions. With a coalition of the anti-system Five Star Movement (M5S) and the nationalist League party poised to take power, the prospects for migrants reaching Italy after a hazardous sea crossing from Libya look even dimmer. The outgoing center-left government has already all but closed the maritime border following controversial accords signed with the Libyan government as well as local authorities, including armed groups, in an effort to curb the migrant influx. Nearly 700,000 people have landed on Italian shores since 2013. Since the start of this year, Italy's interior ministry has tallied 7,100 arrivals via Libya and 3,500 more via Tunisia, Algeria or Greece. According to the UN migration agency IOM, the Libyans have themselves intercepted 6,500 people seeking to reach the southernmost tip of Europe. Now the new, populist government has signalled it will push EU partners to shore up the bloc's external frontiers and accept an automatic and more equitable shareout of migrants across the continent. It also wants to speed up asylum procedures and repatriate those rejected and those from countries deemed 'safe.' " • Arrivals of migrants to Italy slowed by 80% from July 2016 to July 2017, according to thelocal.it, after Marco Minniti, a veteran secret services coordinator became interior minister in December 2016 and reached an accord with Libya to keep migrants in detention centers on Libyan soil. Human rights groups and the United Nations have accused most of the centers of "inhuman" conditions. Migrant arrivals have fallen also due to a key change in procedure. Whereas previously the Italian coast guard coordinated rescue operations from Rome, operational authority now largely resides with Libya. For migrants, the difference is critical. Coordination by Rome means they are taken to Italy whereas Tripoli taking charge means they again are left at the mercy of a system stalked by violence and extortion as well as poor conditions. • Italy's new government hopes to do something that Minniti tried and failed to do. It wants Italy to simply refuse to take in migrants picked up by European, military or humanitarian rescue vessels. The MS5 / League govenrment hopes to send home as quickly as possible the bulk of new arrivals by speeding asylum procedures and systematically deporting those whose claims are rejected, as well as an estimated 500,000 illegal immigrants already in Italy. But, thelocal.it says that at the current rate -- just 6,514 official expulsions in 2017 amid opposition from countries of origin to take back their nationals -- the process could take more than 75 years. • • • THE ITALIAN MARKETS. Reuters reported on Friday that Italian markets were hammered alst week by fears of a government spending binge. Reuters said Italy’s long-term borrowing costs jumped to more than seven-month highs on Friday while stocks in Milan fell more than 1% after the two "anti-establishment" parties pledged to increase spending in a deal to form a new coalition government. After the League and the 5-Star Movement outlined their economic plans, the Euro also fell, ceding early-session gains against the dollar. The agreement between the M5S and the League, says Reuters, "puts Italy, the Eurozone’s third biggest economy and one of its most indebted states, on a collision course with the European Union and risks further increasing its debt." Reuters quoted Commerzbank's Christoph Rieger : “We’ve had headlines left, right and center from Italy this week and while the upshot is that the reality is not as scary as thought, the investment community is meeting and deliberating their next steps. They see the true state of mind of the government and, while the measures don’t include debt writedowns, it’s clear that there will be no fiscal restraint and no structural reforms for a country that desperately needs it.” Reuters said that earlier last week, two-year Italian bond yields pushed back into positive territory -- making Italy the only Euro zone country other than Greece to have two-year borrowing costs above zero. Based on the stated spending plans of a M5S / League coalition, analysts at Goldman Sachs estimated that Italy’s 2019 government deficit-to-GDP ratio could rise to around 3.5% -- well above the 0.8% the Italian government projected in a Stability Pact recently submitted to the European Commission. The Italian developments meanwhile increased investors’ bearishness on the Euro, which fell 0.2% to $1.1778 to approach the five-month low reached on Wednesday of $1.1763. Italy’s main stock index was also headed for its worst weekly drop in more than two months, down 2.6% on the week. • The big question in the financial community is where is the new Italian coalition going to get the money for its spending program. Ratings agency DBRS warned last Thursday that economic proposals by Italy’s prospective new government could threaten Italy’s rating. DBRS has Italy on a BBB rating -- an investment grade score -- with a stable outlook. Analysts said the prospect of increased short-term bond issuance was also causing some concern in bond markets. The common government policy agenda of Italy’s government would include the issuance of short-term government bonds to pay companies owed money by the state, the League’s economics chief, Claudio Borghi, said on Friday. Still, siad euters, although the Italian/German bond yield spread has widened substantially this week, the gap remains below levels seen early last year when Euro-breakup fears gripped markets ahead of French elections. It’s also well below the level seen during that 2010-2012 Eurozone debt crisis. • • • DEAR READERS, one of the campaign promises the League made before the election was exploring the possibility of Italy leaving the Euro single currency, what the Italian media called an ‘Italiaexit.’ While this did not make the final governing contract, the League’s economics spokesman Claudio Borghi will continue to push for it in government, according to the Italian newspaper il Giornale, which states the possibility of it happening remains “concrete.” • Why would Italy want to leave the Euro? Consider this. Reuters reports that the European Commission said on Saturday Greece had reached a deal with its international lenders on a package of reforms. The Commission said Greece would present the reforms at a meeting of Eurozone finance ministers, known as Eurogroup, on May 24 and would implement the reforms ahead of another meeting on June 21, without giving further details. The country is close to emerging from a sovereign debt crisis that plunged the economy into its biggest depression in decades, threatening to rupture the Eurozone. It has received a record 260 billion Euros in repeated bailouts since 2010. Yes -- Greece is coming out of its economic debacle, one that saw the Eurogroup, led by German austerity freaks, kill Greece for the future, leaving it with a debt that cannot be repaid EVER, and an economy that cannot support its people or pay for even a reasonable public social pension for retirees or the hope of an economy strong enough to provide sufficient jobs for its citizens. Greece has been ruined. It may rise from the ruins, but that will depend on a fierce will of its people, and a Eurogroup that listens to the IMF and forgives all the Greek debt created in the fiasco called the "bailout." • That is why Italy is having a populist allergic reaction to the Euro. It has seen the future of continuing to try to please its antagonists in the Eurogroup -- the future is another Greece, left alone to suffer economic ruin and to be overrun by unwanted illegal migrants foisted on it by a cynical European Union led by Germany. • As a Breitbart commenter, "canadianhegemony," said on Monday : "It will be a fight every step of the way but I am confident Salvini in particular will stick to his guns. Italy has suffered horribly in the EU and has truly has had the worst of all worlds : Tied to the Euro and with no control of monetary policy, having near-zero voice in the EU dominated by Germany, borne the brunt of massive uncontrolled immigration via the Mediterranean, severely strained social services, mass unemployment, loss of public safety, social chaos and -- unbelievably-- near-negligible growth in the national economy over the past 20 years. The surprise is not that populist Euroskeptics collectively won a substantial majority, the surprise is that it didn't happen sooner. Here's hoping Salvini shows Theresa May what real leadership looks like. Italexit!" • In the same way that Barack Obama and his Progressive policies made Donald Trump's election inevitable, the effective coup d'état orchestrated by Germany and the Progressive-Globalist Eurocrats in Brussels that tossed out Silvio Berlusconi, replacing his government with Euro-friendly technocrats, made this Italian populist M5S / League government inevitable. The political revolution in Italy -- after the débâcle in Greece -- was predicted by analysts who followed the Greek debt crisis. Italy, a founding member of the EU, whose capital lent its name to the EU's founding document, the Treaty of Rome, now finds itself fighting against the entire European Union project. It is a profoundly significant and symbolic blow to the architects of the federal EU that a founder states feels it can no longer survive within its economic-fiscal framework tailor-made for Germany and northern Europe. • Le Parisien said it clearly : "Après le Brexit, après la progression de l’extrême droite dans de nombreux pays européens, l’arrivée en Italie de cette nouvelle coalition au pouvoir ne manque pas de soulever l’inquiétude en Europe. Inquiétude sur les plans économique et… politique....Reste que les partenaires de l’Italie au sein de l’UE l’ont largement poussée sur ce chemin de désolation, en laissant la péninsule se débrouiller, seule, face à une puissante vague migratoire venue d’Afrique. Où était la solidarité européenne quand il s’est agi d’accueillir des migrants ? Aux abonnés absents." ["After Brexit, after the advance of the extreme right in numerous European countries, the arrival in Italy of this new coalition government cannot help but worry Europe. Worry about economic and political plans...after Italy's partners at the heart of the EU massively pushed Italy onto this road to desolation by leaving Italy to manage alone in the face of a powerful wave of African migrants. Where was European solidarity when it came to welcoming these migrants? Absent."] • As with Trump's victory in America, the victory of populists in Italy demonstrates to anyone with eyes to see that -- just as Donald Trump signaled the beginning of the re-establishment of the people-based republican America of the US Constitution -- the Progressive, elitist, globalist open-border anti-ordinary-taxpayer-citizen EU cannot survive. It will be killed by Europe's language-and-tradition-anchored, nationalist cultures. The death may be slow and painful, but the European Union is doomed.